K.K.
Hey L.,
Leather is a nice option but we all know it's pricey; with a new baby and a toddler I wouldn't shell out the money.
We don't have a dog, but we have 18 month twin boys and 2 cats - and we bought a couch while I was pregnant.
We went with what was affordable yet comfortable and then bought 4 - yes 4 couch covers. We rotate the covers about once every 7-10 days unless something gets spilled on them, puked on, or when there is super-shedding. I think doing it this way has helped a lot. We did have to teach the boys to leave the couch covers alone, but now they don't mess with them.
We looked at it from the perspective that no matter what we buy now, we will probably want to get rid of it once the boys are older and can control their messes better. We are thinking once they are in first grade we'll get a new one.
Good luck!